What is a lien?
A right to keep possession of property belonging to another
person until a debt owed by that person is discharged.
A trustee has the right to be indemnified against proper trust
expenses out of the assets of the trust.
A trustee has a lien over the trust fund to secure their right
to be indemnified.
When it is important?
In the event of:
- An appointment to a beneficiary
- A change in trustee
- An insolvent trust
- Contingent liabilities arising
Trustees Rights
- Reimbursement of costs
- Exoneration for any liabilities
- Realisation of assets
- Retention of trust fund
Important considerations
When a trustee enters into a contract with a third party it is
personally liable on that contract unless it contains a term that
excludes personal liability.
